January 22, 2018

DRC’s new draft mining code worries miners


Major international mining groups including Glencore, Ivanhoe Mines, Randgold Resources and AngloGold Ashanti have voiced their   concern over the revised draft mining code the government of the Democratic Republic of Congo (DRC)  is looking to implement.

According to a report by Miningmx, the mining groups said  the new mining code process amounted to a “unilateral revision of the tax and legal system currently governing the industry.”

They said the main objective of the new code –  an immediate  planned increase in revenues from nearly all the taxes, charges and duties levied under the 2002 Mining Code  – “cannot be achieved as things stand now.”

“These increases can in no way affect the current titleholders before the expiry of a 10 year period from the planned revision as the 2002 Mining Code established a stability mechanism guaranteeing a 10-year legal certainty for investors, an incentive practice applied in various countries,”  the mining groups stated.

They also pointed out that the mining sector in 2015 generated 98% of the DRC’s exports and 25% of government revenues and also contributed more than 21% to the country’s gross domestic product.

The mining groups stressed the poor economic climate in the country and the fact that the DRC government owed $1 billion in unpaid VAT liabilities.  They commented that they recommended “caution to preserve the business climate in the sector.”

The joint statement follows  a series of earlier warnings sounded by Randgold Resources CEO Mark Bristow who in April said the new draft code “could be catastrophic to the DRC economy.”

At the time Bristow also called on other mining companies operating in the DRC to get involved because, “unlike South Africa, the DRC is a country where you can engage in an open forum with government and 90% of the time the commercial logic will prevail.”

But he added, “It’s crucial that the mining companies step up to the plate. That’s what I’m doing. I’m joining the debate.”

The operating subsidiaries included in the joint press release are: Kamoa Copper (controlled by Robert Friedland’s Ivanhoe Mines); Kamoto Copper ( Glencore);   Kibali Gold Mines (controlled jointly by Randgold Resources and AngloGold Ashanti); Kipushi Corporation ( Ivanhoe Mines);  Mutanda Mining (Glencore) and MMG Kinsevere.

Source: Miningmx

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